Quick summary: Our recommendation is to use eToro to short Bitcoin. They have the most popular cryptocurrencies on offer, great support, and have an easy system for shorting cryptocurrencies in general.
While there are a lot of options out there for buying BTC, shorting is a different story. Luckily for us here in Australia, we do have a few crypto brokers and exchanges that allow for CFDs and shorting.
One of those brokers is eToro, which we’ll be using for this guide. Let’s get started!
How to Short Bitcoin in Australia
A quick recap first on what shorting actually is: The main objective of shorting or short selling is to make a profit (of course). The idea is to sell a stock/cryptocurrency hoping it will drop in value so you can buy it back later for cheaper, thus creating a net profit.
Shorting Bitcoin can be done in 4 easy steps:
1. Choose a crypto exchange
As mentioned before, for this guide we’ll be using eToro as they offer the ability to short the most common cryptocurrencies.
You can, of course, use any other crypto broker to follow along, they all work very similarly.
2. Create an account on the crypto trading platform
Let’s start with just signing up with eToro.
The sign-up process is very easy, as is the verification that needs to be completed afterwards so you can get started.
3. Funding your account
Next is funding your account. You have several options when it comes to depositing AUD into your eToro Account. These include a bank transfer, credit card, debit card, PayPal, and more.
4. Short Bitcoin
Now for the actual shorting:
- Starting off at the search bar at the top, find Bitcoin by entering the name or symbol.
- Then on the crypto page/section, on the right side, hit the TRADE button to enter the trading interface.
- At the top of the trading interface: Click on sell to short sell the stock.
- Enter the amount for which you want to sell Bitcoin and click on “Open Trade”.
Once you’re ready to close the trade, hopefully when the value of Bitcoin has dropped, go to your Portfolio, find the Bitcoin trade, and click on the red cross to close the trade.
If your assumption/prediction was right, then the profit will be added to your account after closing the trade. If you were wrong on the other hand, you’ll incur a loss which will be debited from your eToro account.
Congratulations, now you know how to short Bitcoin!
Disclaimer: Trading, investing, and dealing with digital and cryptocurrencies might involve a lot of risks. Their prices are volatile and performance is unpredictable. Their past performance is no guarantee of future performance.
Affiliate Disclosure: This site is supported by its users. We may receive commissions for purchases made through the links on our site. This does not impact our reviews, guides or comparisons.
Where to Short Bitcoin (BTC)
Aside from eToro, the other major exchange you can use is Binance.
While Binance tends to be a bit more complex compared to eToro, they do have more cryptocurrencies on offer.
Frequently Asked Questions
Can I short Bitcoin on Binance?
Yes, you can short Bitcoin on Binance. They have over 300 cryptocurrencies on offer and specialise in the crypto market. They also have a great app and competitive fees.
Bitcoin is a cryptocurrency. It is a cryptocurrency that uses cryptography to create a decentralized digital currency. It is a decentralized digital currency that can be used without the assistance of a central authority such as a central bank or company. It is different from fiat currencies, such as US Dollars and Euros, that are issued by government agencies. Because it is decentralized, users can use it on a peer-2-peer network to send funds between each other.
Satoshi Nakamoto is the unknown creator. He or she had the idea for an electronic peer to peer cash system. The whitepaper describes the creation. While Satoshi Nakamoto is not known to be the real person, speculation has been rife about his identity.
It was launched in January 2009 and the first genesis block was mined on 9 January 2009.
The general public may perceive Bitcoin as a kind of physical coin. However, Bitcoin is far more than that. Bitcoin is actually a distributed accounting system that is stored as a chain of blocks. This is why the name blockchain was given to it.
If Alice wishes to transact business with Bob in a centralized system, such as a bank's, the bank holds the ledger describing how much balance Alice and Bob have. The bank maintains the ledger and will verify whether Alice has sufficient funds to send Bob money. The Bank will then debit Alice's bank account and credit Bob the latest amount after the transaction has been completed.
Bitcoin, on the other hand, works decentralized. Bitcoin uses a distributed ledger to ensure that transactions are verified and maintained by a central authority, such as a bank. Everybody can download and use a node to take part in the network. This will give everyone a copy indicating how much balance Alice has and Bob has. There will also be no disputes about the fund balance.
Let's suppose Alice was to make a transaction with Bob using bitcoin. Alice must inform the network about her bitcoin transaction. She will send $1 to Bob using an equivalent amount of bitcoin. How can the system tell if she has enough bitcoin for the transaction to be completed?
Here is where mining occurs. A Bitcoin miner will use the computer rigs of another person to verify Alice's transaction. A complex puzzle is required to stop a miner attempting to add arbitrary transactions. Only after the miner has solved the puzzle (called Proof of Work), can he or she add transactions to the ledger.
Running these computer rigs is expensive due to capital expenditures for electricity and hardware. Miners are paid with new supply bitcoins as part its monetary system, and some fees by the person who wishes transact (in this example it is Alice).
The Bitcoin ledger can be trusted to be secure against fraud. Although the Bitcoin protocol is highly resilient, there are still risks. For example, miners can control more than 51% the total computation power.